The Government that didn’t shut down

The Government that didn’t shut down

While the US cable news networks’ countdown clocks ticked away towards the government shuttering its doors last Friday, the real countdown last week was the start of the 2012 US presidential campaign.

The dynamics of that campaign are being shaped by the developing fight over the 2012 budget, the government’s debt ceiling and a longer term debate over the structure of expensive entitlement programmes like Social Security, Medicare and Medicaid.

Conservative Republicans have successfully framed the debate so far.  Their tough negotiating stance on this year’s budget, Budget Committee Chairman Paul Ryan’s cuts driven budget proposal for 2012 and Speaker John Boehner’s policy requirements for a vote to extend the government’s debt limit, due to be hit in just a few weeks, have put Republicans firmly on the front foot. All of this is of course done while refusing to put tax increases on the table; framing the choice as one between cuts and deeper cuts.

Obama has largely refrained from getting involved in the details of this debate – responding to criticism during last year’s health care debate that he lost his bargaining power by becoming legislature in chief rather than the country’s chief executive – until now. This stance changes this afternoon with Obama set to deliver a major address setting out broad principles to address the country’s longterm fiscal challenges.

So what are the politics of this debate?

For Republicans, and particularly the scrum trying to garner favour in early primary states for the 2012 Republican nomination, there is a further return to core principles of fiscal conservatism in response to the Tea Party’s calls for smaller government.  After the Bush years of fiscal largesse, Republicans in the House are using Democrats and President Obama as a foil to frame a debate about low taxes, low spending and growth. The problem for the Republican leadership is to balance responding to the Tea Party with their own need to compromise. It will be interesting to see how many Republican members defect in tomorrow’s budget compromise vote.

For Democrats, protecting entitlement spending is both innate to their politics and critical to keeping their own base fired up ahead of what could be devastating elections in 2012, with Democratic control of the Senate at risk. Programs like Social Security and Medicare are sacred cows that they will be loath to seen sacrificed in any fiscal compromise. Their liberal lobby groups will also hold their leaders to commitments to eliminate the Bush tax cuts for wealthiest Americans, having seen that commitment put off this past December’s tax compromise.

So what about the White House?

President Obama will further his Clintonesque tack to the centre ground while trying very hard not to appear Clintonesque. Obama’s message in the State of the Union address this year was all about taking tough choices while continuing to make critical investments to ‘win the future’. He will try to balance the need to show he is an adult, ready to compromise and willing to make tough choices, while doing enough to keep his own liberal base satisfied.

The real challenge for Obama is to keep his liberal base satisfied while pursuing the pragmatic post-partisan approach upon which he built his winning coalition in 2008. His success in this year’s budget debate will foreshadow his ability to win the future in November 2012.

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